WazirX Wins Singapore Court Approval for $234M Hack Recovery Plan

The Singapore High Court’s October 13 approval came after WazirX demonstrated broad consensus among affected users, with the revised plan securing 95.7% support from participating scheme creditors in an August revote. The voting turnout represented 143,190 participating creditors holding approximately $196 million in approved claims, providing the court with clear evidence of user backing for the recovery framework. This overwhelming support proved crucial in convincing the Singapore judiciary to greenlight the restructuring after initial concerns about the plan’s structure and oversight mechanisms.

WazirX founder Nischal Shetty acknowledged the significance of user support in achieving this milestone, stating on social media: ‘Thank you to everyone who supported this difficult phase of WazirX. The Singapore High Court has approved the scheme. It’s your support and love that has made this possible.’ The strong creditor turnout and near-unanimous approval provided the legal foundation the exchange needed to overcome earlier court objections and move forward with the court-supervised recovery process.

The recovery plan addresses the consequences of a sophisticated July 2024 security breach that exploited a Safe Multisig wallet, draining $234 million in user funds from the platform. The hack, which media reports linked to advanced cyber operators, forced WazirX to freeze both cryptocurrency and rupee withdrawals while exploring legal options for user compensation. The incident represented one of the most significant security breaches in the crypto exchange’s history and triggered immediate regulatory scrutiny.

The path to court approval was not straightforward, with the Singapore court initially rejecting WazirX’s first restructuring proposal due to concerns about the plan’s structure and oversight mechanisms. This rejection forced the exchange and its legal advisors to rework the proposal substantially, requiring a fresh creditor vote and additional legal submissions before returning to court. The revised plan incorporated better oversight provisions and addressed the court’s initial concerns, ultimately securing the necessary judicial endorsement for implementation.

Under the approved scheme, affected users can expect to recover up to 55% of their lost funds through a carefully structured combination of immediate liquid payments and future-oriented recovery instruments. The plan specifies that initial distributions will be made in stablecoin or USDT equivalent, providing immediate liquidity to users while the exchange works to recover additional assets over time. This hybrid approach balances immediate user needs with the practical realities of asset recovery.

The recovery framework includes the issuance of Recovery Tokens that represent remaining claims to be fulfilled as WazirX regains assets or generates revenue. These tokens will provide users with a mechanism to participate in future recoveries while giving the exchange flexibility in managing its repayment obligations. The plan also shifts part of the repayment responsibility to entities within India to comply with local regulatory requirements, a modification that was specifically highlighted during court proceedings as necessary for legal compliance.

With court approval secured, WazirX has committed to beginning distributions of available liquid assets within 10 business days of the scheme taking effect. This timeline will trigger the initial USDT transfers to eligible users while simultaneously recording Recovery Tokens for the remainder of approved claims. The exchange must now complete final legal formalities and coordinate with payment processors and regulators to ensure smooth implementation of the repayment program.